Warhoftig v. Allstate Insurance

—In an action upon a homeowner’s insurance policy to recover damages for losses incurred as a result of water damage, the plaintiffs appeal from an order of the Supreme Court, Suffolk County (Luciano, J.), entered April 30, 1991, which granted the defendant’s motion to dismiss the complaint as time-barred by the two-year period of limitation set forth in the parties’ insurance policy. Ordered that the order is affirmed, with costs. The plaintiffs suffered a casualty loss in June 1985. After several discussions and three visits to their premises by the defendant’s representative between July and September 1985 there appears to have been no contact between these parties for more than three years. Thereafter, in late 1988 or early 1989, the plaintiffs retained an attorney who renewed discussions with the defendant. When settlement efforts fell through, this suit was commenced in or about July 1990. The defendant promptly moved to dismiss on the ground that the suit was time-barred. The Supreme Court granted the motion and we affirm. On the record before us, it is clear that the defendant may not be estopped from asserting that the instant action is time-barred by the two-year period of limitation set forth in the subject insurance policy (see, Frank Corp. v Federal Ins. Co., 70 NY2d 966, 968; see also, Culinary Inst. v Aetna Cas. & Sur. Co., 151 AD2d 638; Krugman & Fox Constr. Corp. v Elite Assocs., 167 AD2d 514). The mere fact of some renewed communications or settlement negotiations between the plaintiffs and the defendant, both before and after the expiration of the period of limitation contained in the subject insurance policy, does not indicate that the defendant was waiving its contractual rights. "Waiver is an intentional relinquishment of a known right and should not be lightly presumed” (Frank Corp. v Federal Ins. Co., supra, at 968; see, Blitman Constr. Corp. v Insurance Co., 66 NY2d 820). We find that the second and third causes of action asserted in the complaint fail to state a cause of action in any event. [259] Damages for severe mental and emotional distress by reason of the undue delay in processing a claim and the subsequent denial of payment are not recoverable in circumstances where the contract of insurance does not create a relationship out of which springs a duty to the plaintiff separate and apart from the contractual obligation (see, Fiore v State Farm Fire & Cas. Co., 135 AD2d 602). Nor are punitive damages privately recoverable for unfair claim settlement practices (see, Telemaque v New York Prop. Ins. Underwriting Assn., 162 AD2d 444; see also, Roldan v Allstate Ins. Co., 149 AD2d 20). Moreover, we note that a demand for punitive damages may not constitute a separate cause of action for pleading purposes (see, Porter v Allstate Ins. Co., 184 AD2d 685). Thompson, J. P., Balletta and O’Brien, JJ., concur.